Political Economy and Development Free Online FlashCards

What does political economy examine?

Political economy examines how political institutions, economic systems, and public policies interact, including who controls resources, makes economic decisions, and benefits from them.

What three questions does every economic system answer?

An economic system answers three questions: what should be produced, how goods and services should be produced, and who should receive them.

How do property rights affect development?

Secure property rights encourage investment, while arbitrary expropriation discourages it by making ownership and future returns uncertain.

Why is GDP an incomplete measure of development?

GDP measures the value of final goods and services produced within a country. It does not directly measure distribution, political freedom, environmental damage, or human dignity.

How do progressive, proportional, and regressive taxes differ?

A progressive tax takes a larger percentage of income from higher-income taxpayers; a proportional tax applies the same percentage, and a regressive tax burdens lower-income households relatively more.

What are global value chains?

Global value chains divide production among countries, enabling specialization, lower costs, technology transfer, and access to larger markets.

What does the resource curse describe?

The resource curse is the possibility that oil, gas, or mineral wealth produces corruption, weak diversification, conflict, or authoritarian politics instead of broad-based development.

What is policy capture?

Policy capture occurs when public institutions serve narrow interests because concentrated economic power shapes policy design and decision-making.

What is policy feedback?

Policy feedback occurs when policies reshape later politics by creating beneficiaries, changing expectations, and reorganizing interest groups or political coalitions.

What is a mixed economy?

A mixed economy combines private markets with government ownership, regulation, redistribution, and social programs. Nearly all large economies are mixed in practice.

What is state capacity?

State capacity is the ability of governments to collect taxes, provide services, regulate markets, and implement policy effectively.

How does the Gini coefficient interpret inequality?

The Gini coefficient summarizes inequality: lower values indicate greater equality, while higher values indicate greater inequality.